Greek Financing Talks Break Down Amid Deep Divisions Over Bailout

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from The Wall Street Journal,

Greece rejects extension of bailout under terms offered by eurozone finance ministers.

Negotiations over how to keep Greece afloat broke down abruptly Monday, demonstrating a wide gulf between Athens and its European creditors and triggering a new, heightened state of uncertainty about the country’s future inside the currency bloc.

The collapse in talks among eurozone finance ministers leaves Greece and its lenders racing to reach a new financing deal for the indebted country before its existing bailout plan expires. The ministers called off the negotiating session just a few hours after it began, saying Greece left them little hope of securing an agreement.

The ministers, in turn, presented the new left-wing government in Athens with an ultimatum: Agree to an extension of the current €240 billion ($272 billion) bailout by the end of the week or lose the lifeline of rescue loans that have sustained Greece for nearly five years.

Greek Prime Minister Alexis Tsipras and his finance minister, Yanis Varoufakis, oppose the terms of the rescue deal from the eurozone and the International Monetary Fund, saying they are hurting its economy and society.

“It’s not a bluff, because it’s the only option we have,” Mr. Varoufakis said of his government’s position after the meeting. “It’s plan A, there is no plan B.”

If the bailout ends as scheduled on February 28, the Greek government will lose access to the last €7.2 billion slice of its current bailout, potentially leaving it unable to make debt repayments looming in March. That could, in the worst case, trigger a series of events that would force Greece out of the eurozone.

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